Medicaid Expansion: The Government-Sponsored Lemon

Idaho is now projecting expansion to cost $6.6 billion—up from $4.1 billion

Medicaid Expansion: The Government-Sponsored Lemon

Idaho, Utah, and Nebraska should avoid Medicaid expansion this November

by Nick Stehle

Before ObamaCare was signed into law, state Medicaid costs had been on the rise, straining state resources and putting health care for the most vulnerable at risk. So when the federal government promised to foot the bill for states to expand Medicaid to able-bodied adults the free money seemed too good to be true. And it was.

Enrollment of able-bodied adults in Medicaid expansion has massively outpaced projections, leaving states stuck with a new generation of welfare-dependent, able-bodied adults at a cost millions of dollars greater than they anticipated—or had planned for. It didn’t take long to realize: these states were sold a clunker.

Despite the negative experience of every state that has expanded Medicaid—including surging enrollment and massive cost-overruns—several states, including Idaho, Utah, and Nebraska are considering expanding Medicaid through ballot initiatives this November. But voters need to understand the ramifications of expanding Medicaid before it’s too late.

Since 2000, spending on able-bodied adults dependent on Medicaid has increased from just $19 billion to nearly $158 billion—an increase of more than 700 percent. This increase is straining states’ budgets and threatening funds that should be spent on education, public safety, infrastructure, and the truly needy.

A report released by the Foundation for Government Accountability (FGA) earlier this year shows just how dire the current situation is for expansion states. Projections for enrollment and state costs completely missed the mark. Within just one year of implementing Medicaid expansion, states blew past their maximum enrollment projections by an average of 61 percent. And by 2016, states had enrolled twice as many able-bodied adults as anticipated. In fact, states have already signed up 55 percent more able-bodied adults than anyone anticipated would sign up by 2022. Increased enrollment means increased costs, and states—and the truly needy—have had to pay the price.

There are now 12.4 million able-bodied adults enrolled in Medicaid expansion, nationwide. And with projection estimates blown out of the water in every single state that has expanded Medicaid, there’s no doubt what will happen if new states choose to expand. Idaho, whose citizens will be voting on whether to expand Medicaid this November, originally projected that no more than 88,000 able-bodied adults would ever enroll in Medicaid expansion—but given the reality in other states, that estimate has been increased to 136,000. And in Utah, no more than 189,000 able-bodied adults were estimated to enroll, but that projection now stands at 293,000—nearly double.

Idaho is now projecting expansion to cost $6.6 billion—up from $4.1 billion—and Utah is estimating that expansion will leave taxpayers on the hook for a whopping $10.2 billion. These projections, though, are just that: projections. And as we’ve already seen, most third-party projections have massively underestimated the growth of Medicaid under Obamacare’s Medicaid expansion. Voters in Idaho, Utah, and Nebraska would be wise to remember these projections when they head to the polls in November.

There is no Consumer Reports review of Medicaid expansion—but if there were, it might say this: beware of the lemon.

Massive, unpredicted, over-enrollment of able-bodied adults has burdened state Medicaid programs and put already-strained resources at further risk. Instead of ensuring Medicaid can adequately care for low-income children, pregnant women, individuals with disabilities, and other truly needy citizens, Medicaid expansion prioritizes able-bodied adults at their expense. Citizens should weigh these costs heavily before they cast their ballots in November.

Nick Stehle is a Senior Research Fellow at the Foundation for Government Accountability.